Analyzing the determinants of non-farm income diversification of farm households in Peshawar district of Pakistan

  • Nazish KANWAL China Agricultural University, Beijing
  • Muhammad Ammad KHAN China Agricultural University
  • Zhihao ZHENG China Agricultural University, Beijing
Keywords: Income diversification, Farm income, Non-farm income, Peshawar district, Pakistan.


The agricultural sector in Pakistan is not well-established to provide full employment opportunities and sufficient income for needed living standard to the rural population. Stagnant agricultural productivity and low returns in farming have led rural residents to look for alternative livelihoods, especially non-farm employment. With this background, the present study is an endeavor to empirically determine the factors of non-farm income diversification of rural farm households in Peshawar district of Pakistan. The study was undertaken in four villages and data was amassed from 196 small farming households by using the multi-stage sampling technique. The data were analyzed using the descriptive statistical measures, the mean of income shares approach and the ordinary least squares regression analysis. The results indicate that in all the selected villages, the pattern of non-farm employment was more or less the same; however, the income from non-farm employment activities had an important contribution towards incrementing the absolute income of farm households. Non-farm income diversification is hence crucial for sustaining livelihoods and an integral dimension for invigorating rural economies. Therefore, the study recommends the promotion of non-farm employment as a good strategy for supplementing the income of small farmers without shifting attention from agriculture.

Author Biographies

Nazish KANWAL, China Agricultural University, Beijing

Department of Agricultural Economics and Management

Post-graduate student

Muhammad Ammad KHAN, China Agricultural University

Department of Development Studies

PhD Candidate

Zhihao ZHENG, China Agricultural University, Beijing

College of Economics and Management

Professor PhD


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How to Cite
KANWAL, N., KHAN, M. A., & ZHENG, Z. (2016). Analyzing the determinants of non-farm income diversification of farm households in Peshawar district of Pakistan. Timisoara Journal of Economics and Business, 9(1), 33-48. Retrieved from